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Mondi has €875 mln lined up for projects in Eastern Europe

Paper and packaging group Mondi is planning to spend €875 million ($1,176 billion) on projects in Russia and Poland after Anglo American unbundles and lists the group in London and Johannesburg on July 3.

Anglo shareholders will receive five Mondi plc shares and two Mondi Limited shares for every 20 Anglo shares held. Mondi plc will be primarily listed in London, with a secondary listing on the JSE, while Mondi Ltd will be primarily listed on the JSE. Mondi plc shares will represent about 71% of Mondi shares and the Mondi Ltd shares will make up the remaining 29%. Anglo shareholders will vote on the unbundling on June 25. Mondi CEO David Hathorn said on Friday that the firm was a 'growth-driven company', and mergers and acquisitions would be part of the company's future. Analysts expect Mondi to pursue acquisitions in Eastern Europe and Russia.

In Russia, Mondi has approved a €525 million ($705.5 million) expansion of its Syktyvkar mill. However, the project is subject to obtaining permits as well as an agreement on Russian government support. Mondi said that the benefits of the project included lower operating costs, efficiencies as well as greater electricity generation. The group said the venture would result in an increase of 190 000 tons a year in pulp production, 52 000 tons in uncoated wood-free paper output and 46 000 tons in containerboard production. The extra uncoated wood-free paper and containerboard output would be absorbed by the growing domestic Russian demand. The Russian project is due for completion midway through 2010.

In Poland, Mondi is looking to spend €350 million ($470.3 million) on a recycled containerboard machine with production of 470 000 tons a year at the Swiecie mill. in Poland. The project includes a new corrugated box plant with an annual capacity of about 250 million square meters of board output. The project is at the advanced feasibility stage and has been approved by the Mondi board, subject to completion of the separation from Anglo and agreement on the level of support from the Polish government. (busrep.co.za)